Kennedy health plan estimated to cost $1 trillion

By Richard Cowan

WASHINGTON (Reuters) - A U.S. Senate panel proposal to expand healthcare coverage would increase the federal deficit by about $1 trillion over 10 years and still leave millions without insurance, a congressional analysis said on Monday.

The Congressional Budget Office (CBO) said its calculations were preliminary and stressed that the Democratic-sponsored legislation was still being drafted.

But its estimates could fuel opposition to President Barack Obama's drive for healthcare reform, which critics fear would result in an expensive government takeover of the U.S. healthcare system.

There are now an estimated 46 million people in the United States without any health insurance, and devising a way to get them coverage has become a major goal of Obama's presidency.

In a letter to Senator Edward Kennedy, chairman of the Senate's Health, Education, Labor and Pensions Committee and author of the plan, the non-partisan CBO estimated that once the reform plan was fully implemented about 39 million people would get coverage through new insurance exchanges -- a kind of clearinghouse for medical plans.

Individuals and small businesses would be able to shop in the exchanges for policies offered by insurance companies. Obama and fellow Democrats hope that a new, government-run plan would be one of those options.

But the CBO also said the number of people who receive coverage through an employer, currently the main provider for health benefits for most Americans, would fall by about 15 million, or 10 percent. And the number of people covered by government programs would fall about eight million as they move into policies offered through exchanges, the CBO said.

SHORT OF OBAMA'S GOAL